Consider adding fixed routes in the wake of Greyhound cutbacks

The federal government allocates money to states for rural intercity bus transportation

When Greyhound Lines Inc. announced a major scale back over the summer, Canada had no choice but to scramble to fill the gap that would impact an estimated 2 million riders.

British Columbia’s Passenger Transportation Board, the provincial governmental entity responsible for approving intercity bus routes, expedited applications to encourage operators to quickly apply to pick up the routes Greyhound was abandoning.

By the end of October, Greyhound pulled service across most of Western Canada, leaving in place one route between Vancouver and Seattle. The struggling Dallas-based transportation giant blamed the decision in part on the region’s declining ridership, which has plummeted 46 percent since 2010.

United Motorcoach Association member Wilson’s Transportation was one of several companies that stepped up to fill the void. The Victoria-based company with a fleet of 150 vehicles received approval to expand its fixed-route service beyond Vancouver to Kelowna and Kamloops. The company is still waiting to hear back on a request for an express route between Vancouver and Whistler.

It made sense to step into those routes because they connect to the company’s existing routes, said Joe Jansen, Wilson’s executive vice president.

“We think we can make it profitable, but we’ll see how the market responds,” Jansen said.


Federal dollars for fixed routes

Although a private company — owned by British transportation company FirstGroup since 2007 — Greyhound has provided an essential public service since the early 20th century. But as the struggling bus giant continues to shed more routes and stops, governments are stepping in to support this affordable mode of transportation. In the U.S., the federal government has been setting aside funding for intercity bus routes since 1991.

More motorcoach operators should consider expanding into fixed routes when government subsidies are available, says Steve Klika, a Coach U.S.A. consultant and former interim CEO of the UMA.

His advice for companies is to reach out to transportation officials at the state and local levels to explore where there are needs for fixed routes.

“There are a number of operators that do various fixed routes around the country. There’s no question voids are happening with Greyhound now. The local communities have to determine whether there’s a need for service,” Klika said.

The Intercity Bus Program requires each state to spend 15 percent of its annual Formula Grants for Rural Areas to support intercity bus transportation unless the governor determines the needs are being met adequately.

The Federal Transit Administration defines intercity bus transportation as regularly scheduled bus service for the public that operates with limited stops over fixed routes connecting at least two urban areas that aren’t close to each other.

Charter bus operators are eligible to participate in the program if they are operating intercity bus service.


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Arrow Stage Line’s sister company, Black Hills Stage Lines, has been operating scheduled routes since 1962, when CEO Steve Busskohl’s dad, Doyle, decided to operate one from Omaha City to Rapid City, South Dakota. The geography inspired the name.

In 2004, Black Hills picked up a day route across Nebraska that Greyhound dropped.

“We’ve been running it ever since,” said Busskohl, who now leads the family owned national charter service. His grandfather, Carl Busskohl, started the business in 1928, driving his seven-passenger Buick between his hometown of Norfolk, Nebraska, and small towns across Nebraska, South Dakota and Iowa. By the 1940s, as Greyhound expanded across the U.S., Arrow shifted to charter bus service.

These days, scheduled routes bring in roughly five percent of Arrow’s total revenue.

The company also ran a route to Denver through Wyoming, known as the Gunnison Route, from 2009 until June 2018. Over the summer, the Colorado Department of Transportation picked up the route as part of its Bustang network of intercity and interregional routes.

Unfortunately for Black Hills, Alpine Express and SRDA won the state’s bid. They now split up what previously was Black Hills’ route into two separate ones.

Running these rural routes would be even more challenging without federal dollars — known as 5311(f) funds — which are allocated to states for rural intercity bus service. These rural routes aren’t economically sustainable, which is why the subsidies are important. Black Hills receives the funding on all of its routes, said Janice Johnson, Arrow’s director of administrative operations

“The routes are a way of helping out your communities,” Johnson said, adding that they require a network of carriers to work. “You need that relationship with other carriers and dependency in order to make your schedules work,” she said.

The funding is doled out based on fares collected rather than a flat amount. Operators estimate their revenues and costs, and the funding covers 50 percent of the deficit.

“It would be nice to be able to at least cover your costs. Breaking even is better than a smaller loss,” Johnson said.

Right now, the company is working with community leaders in the Big Horn Basin who want to bring intercity bus back to rural Wyoming. Black Hills provided the service until 2014, when local matching funds were diverted to other projects. The Wyoming Department of Transportation is trying to re-establish the service.

Busskohl’s advice for operators who want to get some of the funding is to build relationships with local officials.

“One of the keys for us has been talking to people in the communities who we’re thinking about traveling to or through and getting their support. It makes a big difference,” Busskohl said.

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